Good afternoon. This is Ki Jung Sung from KSOE IR. I would like to start the Q3 2025 earnings presentation. This is going to be our shipbuilding subsidiaries and our key businesses. I would like to go over the key highlights of the quarter, followed by our performance. I will discuss market conditions for shipbuilding and offshore plant businesses and move on to the Q&A session. Currency impact. In Q3, the quarter-end FX rate increased by 46 KRW, while the average rate decreased by 13 KRW. As a result, the overall FX impact was minimal. For reference, the rate had fallen by 49 KRW in the previous quarter. Second, steel prices. Steel prices stayed flattish, with minimal impact on the margin. Despite a bit of losses, steel prices did not impact our margins significantly.
A bit of losses from currency impact and steel prices, but no sizable impact on our margin. Third, one-off factors. At HHI, approximately 25 billion KRW in additional costs were recognized from legacy offshore plant projects. Recently launched projects are proceeding smoothly and continue to maintain solid profitability. At HMD, 53 billion KRW of one-off gains for KiwiRail project cancellation settlement and related cost refunds were recognized. At Samho, around 8.5 billion KRW in restoration costs were incurred due to a transformer fire incident. Next is one-off costs regarding the collective bargaining agreement and merger incentives, including incentives. HHI and HMD recognized 18.6 billion KRW and 7.2 billion KRW respectively. Mostly merger incentives. Lastly, for the annual breakdown of revenue by shipbuilding subsidiary, you may refer to the IR material.
For the breakdown of revenue by vessel type, HHI, LNGC, 49.2% inching down quarter-over-quarter, LPGC 26.4% increasing, and container ships 15.7% decreasing. Samho, LNGC 38.2% inching down, container ships 34.2% decreasing, tankers 15.1% increasing significantly, and LPGCs 5.7% remaining unchanged. MiPo. PCs 62.5% inching down, LPGCs 23.3% increasing slightly, and for other vessels, 13.6% increasing. Page 4, please. I will move on to page 4 and elaborate more on HD KSOE's Q3 2025 earnings. Before moving on to the financial results, let me briefly mention one notable point. Q3, as you know, has been the lowest season in terms of sales, and it is normal to record lower sales than the previous quarter. Despite long vacation periods, our sales rather increased quarter-over-quarter, and it is an exceptional case.
The sales increased by 2.1% quarter-over-quarter and by 21.4% year-over-year, which is attributable to productivity gains and other factors. Despite a weak dollar and seasonal factors, our revenue increased, driven by steadily enhancing productivity, driving our overall revenue. OP increased by 10.5% quarter-over-quarter and by 154.5% year-over-year, a significant increase. Steady improvement in profitability has been maintained, and I will touch on the non-operating parts later. Page 5, earnings by business division. Please refer to the table below, and let's turn to page 6 for further details. Page 6 in sales by key division. First, on the shipbuilding segment. Despite a weak dollar and fewer working days, revenue is solid, supported by higher vessel prices and improving productivity. It would have been better if there was no incident at Samho. Next, offshore.
Sales increased 13.1% quarter-over-quarter and 52.8% year-over-year. The Trion FPU has entered its full-scale construction with 39.4% of completion rate, while the Ruya project recorded a 6.3% progress rate. Engine sales. Engine sales increased 6.4% quarter-over-quarter, 31% year-over-year, driven by higher delivery volumes and an improved product mix. Page seven. Here is the breakdown of OP by division. First of all, shipbuilding. Despite a weak dollar and seasonal factors, OP increased significantly, 7.5% quarter-over-quarter, 128.9% year-over-year, and recorded a very solid profitability with OPM of 14%. Compared to Q2, we have an increase in OPM. Offshore. Offshore slightly turned negative, but excluding one-off factors, the underlying margin remained solid. One-off losses of KRW 25 billion were recognized from a vintage project. Next, engine and machinery.
Engine OP increased 20.9% quarter-over-quarter, 137.5% year-over-year. As I mentioned earlier, overall profitability has improved, supported by sales growth and product mix enhancements. Especially here of engines ratio, if you look at the ratio, two-stroke engine 75% and four-stroke engine 80% showing growth. Naval vessel, which is not included in this page. Sales recorded KRW 373 billion, increasing by 53.7% quarter-over-quarter. Recognition of warship revenue has increased. KRW 15.8 billion, one-off settlement for two frigates that were delivered in 2023 has been made in this quarter. OP recorded KRW 51.1 billion, increasing by 90% quarter-over-quarter. As I recall, profit fluctuations may continue to occur, depending on the timing of project settlements and the mix. In the following quarter and after that, we may witness such profit fluctuations.
Page eight, please refer to the operating performance table of consolidated subsidiaries, and I will provide a more detailed explanation on page nine. First of all, KSOE. On a standalone basis, KSOE turned positive, receiving half-year dividend payments from its subsidiaries amounting to KRW 299 billion. Once again, turning positive. Supported by higher vessel prices and continued productivity enhancements, HHI's shipbuilding segment delivered steady sales and margin growth compared to the previous quarter. As I mentioned earlier, the engine business also maintained a solid operating performance with significant margin improvement this quarter. Although there were one-off costs occurring from a vintage project, it is worth noting the current projects are progressing smoothly. For offshore, we may expect even better results in Q4. Let's move on to Samho. Despite the fire incident, its annual construction target is under control.
Q3 margin was lower than Q2 due to restoration costs and increasing sales portion of tanks, but we expect Q4 margin to recover and show stable operating performance. Page 10. Mipo. Mipo's earnings growth is accelerating. Despite fewer working days, Mipo benefited from faster product mix improvement, higher vessel prices, and stronger productivity gains compared to other subsidiaries. Quite a noticeable change and improvement, especially recognition of projects awarded after 2024 accelerated from 32% to 51% this quarter, and this contributed to rapid margin growth thanks to productivity gains. That was about Mipo. Next, HD Hyundai Marine Engine. Despite the seasonal slowdown, the business achieved steady improvement in ASP and productivity, resulting in higher margins compared to peers and other shipbuilding subsidiaries. Also, the company has engaged in continuous cost control activities, resulting in high margin growth.
There were no one-off factors recorded in this quarter. In Q4, we believe revenue would grow and there will be additional profitability that worth factoring. Lastly, AHDE, HD Hyundai Energy Solutions, although its operating performance appears to have declined from the previous quarter, excluding the one-off Angola project revenue recognized in Q2, the company has continued to show steady quarterly growth. Although domestic sales slightly declined due to the prolonged autumn rain, exports to the U.S. increased significantly, resulting in solid overall performance. Looking ahead, the easing of tariff issues in the fourth quarter is expected to further support U.S. exports, allowing the company to sustain its strong performance. Page 11, non-operating income. Nothing special, due to a KRW 46 increase in the Korean won-U.S. dollar quarter and FX, we recorded foreign exchange-related gains. Page 11, financial ratios.
All four major subsidiaries maintain a net cash position with a combined net cash balance of approximately KRW 8 trillion, a very solid financial standing. The cash flow is very good. That concludes the presentation of HD Korea Shipbuilding & Offshore Engineering Q3 2025 earnings. Next, Mr. Wonsuk Lee, Head of Ship Sales Division, will provide an update on the global shipbuilding market. Hello, I am Wonsuk Lee, Executive VP of Strategy and Marketing at HDKSOE. I would like to present the performance review for the shipbuilding division then share our outlook for the business. Global new orders totaled 51.2 million GT or 1,185 ships, down more than 45% from 113.4 million GT in the same period last year.
This decline reflects the weaker demand sentiment among ship owners amid U.S. trade policy volatility, environmental regulation uncertainty, and a high backlog from 2024 orders. Despite the sluggish orders, HD Group has recorded cumulative orders of $6.2 billion at HHI. $4 billion at Samho, $2.2 billion at Mipo, and $2 billion at HHIP as of Q3 2025, totaling $12.6 billion. This represents 84.2% of our annual order target of $15 billion, demonstrating steady order momentum and continued progress toward achieving this year's goal despite the weaker global demand. As of Q3 2025, the cumulative new building orders by vessel type are as follows. Hyundai, 24 container ships, two VLGCs, two VLECs, two VLACs, and four tankers, including two VLCCs, so 34 units of ships, $6.2 billion.
Samho, five LNGCs, 14 container ships, eight tankers, so 27 units of ships for $4.02 billion. Mipo, 21 container ships, six LNG bunkering vessels, one PC, five MGCs, 33 units of ships, $4.02 billion. HHIP, three PCs, so $22 billion. In total, 97 units of ships, $12.64 billion. Despite the overall contraction in demand this year, we have remained firmly on track toward achieving our ambitious annual targets. By leveraging the continued strength in container ship orders since last year, we focused on selectively securing high-value, high-margin projects to ensure a stable backlog and sustained profitability. This performance underscores our solid competitiveness, supported by superior technological capabilities and agile market responsiveness. As of September 2025, the Clarkson Newbuilding Price Index stood at 185.58, gradually declining from the peak of 189.96 recorded in September 2024.
However, the current level remains more than 40% higher than that of early 2021, indicating the prices are still firm. This trend suggests that ample shipyard backlogs have helped mitigate the pace of price drop despite lower demand. As new order activities have shown signs of recovery entering Q4, new building prices are expected to remain at a high level. I'd like to share an update on the current market conditions by vessel type. LNGC. Up to Q3, only 17 large-sized LNGCs were ordered in the market, a sharp decline compared to 74 units in the same period last year. This is largely attributed to a temporary downturn in the LNG freight market, driven by increased vessel deliveries, reduced LNG imports from China, and a higher share of short-haul trade between the U.S. and Europe, which together have disrupted the overall supply-demand balance.
In addition, delays in several major LNG export projects have further weakened new building activity. However, as new LNG development projects resume and replacement demand for outdated LNG carriers begin to emerge, the LNG carrier market is expected to recover swiftly in the upcoming quarters. Now, container market. Despite uncertainties stemming from U.S. tariff disputes and port fees, the container ship market continues to show strong momentum. This is supported by sustained ton-mile demand due to ongoing disruptions in the Red Sea and by liners' perception that reduced U.S. port fees are now manageable costs through fleet adjustments. Backed by ample cash reserves, major liners are actively expanding their fleets. With continued competition in capacity expansion and the shift toward eco-friendly vessels, a solid level of new orders is expected to persist.
In the tanker segment, vessel supply remains constrained as the U.S. and Europe continue to expand the sanctions on Russia, Iran, and Venezuela. Combined with OPEC+'s production increase, this has pushed crude tanker rates higher sharply. With firm freight rates and low order backlogs, tanker new building activity is expected to gradually increase. For VLGCs and PCTCs, ordering activity has eased following several years of exceptionally strong demand. However, once the current wave of vessel deliveries is absorbed, replacement needs for aging fleets and tightening emission regulations are expected to drive a rebound in new building demand. Following the IMO's recent failure to finalize the net zero framework, there are growing concerns that the resulting regulatory gap could dampen the investment sentiment for new buildings and alternative fuels.
Nevertheless, the IMO's net zero target remains in place, and the industry broadly expects the long-term decarbonization trajectory to stay unchanged. Consequently, companies that delay participation in the clean fuel transition are likely to face increasing cost burdens over time. In this context, the group will continue to strengthen its technological leadership. In addition, given the ongoing market volatility driven by U.S.-China strategic tensions and various geopolitical uncertainties, the group will continue to closely monitor market conditions and pursue a selective profitability-focused order strategy. Amid the rapidly changing global shipbuilding and shipping environment, KSOE remains committed to sustainable growth and shareholder value enhancement, striving to take a significant step forward as a global industry leader. This concludes our Q3 2025 results presentation. Thank you very much for your attention. Moving on, we're going to have Sohn Daejun from Offshore and Energy. Good afternoon.
This is Daejun Sohn from Offshore and Energy. I'd like to present a performance review for the offshore division. Then share our outlook for the business. Our offshore business is actively participating in FEED and EPC dealings for various offshore projects currently being prepared in regions such as the Middle East, including the UAE, Qatar, and Kuwait, as well as Australia and the Americas. Among these, Middle Eastern projects have adjusted their schedules, with contract signing now targeted for early 2026. Renewable energy business, particularly offshore wind power, is actively involved in the FEED process for offshore substations and domestic projects and is making efforts to expand into full EPC contracts. Using our proprietary floating structure model, we are also engaging with multiple developers to participate in floating wind projects in Korea's east coast to Scotland and Taiwan.
In addition, our in-house offshore substation platform model recently received an AIP or approval in principle from a classification society. Which we plan to apply to upcoming FEED projects to further broaden our participation opportunities in offshore wind business. We are currently carrying out TerraPower's SMR demonstration project in Wyoming, the U.S., and conducting joint research with the company to support SMR commercialization. Through these efforts, we aim to strengthen our technological capabilities and expand future business opportunities. Next, market conditions. As oil prices remain above break-even levels, the overall offshore plan market is not overheated but remains generally favorable. Meanwhile, demand for crude oil and natural gas for power generation is expected to continue rising. Energy security is emerging as a key issue for many countries.
Major oil companies are focusing investments in high-return regions such as Guyana, Brazil, and Africa, while national oil companies and IOCs in the Middle East, Australia, and North America are gradually expanding CapEx for domestic offshore oil and gas developments. In the Middle East, including Qatar, the UAE and Saudi Arabia, and Kuwait, offshore gas field development is accelerating with large-scale projects planned. The market expected to stay active. The offshore wind market is seeing some short-term slowdown due to policy changes in the U.S., but mid- to long-term investment and capacity expansion are expected to continue. In Korea, government-led initiatives are increasing expectations for market growth, along with a stronger domestic turbine supply chain. Especially, we are expecting a structural change occurring across the industrial ecosystem here in Korea.
Based on these conditions, we are pursuing a balanced approach across offshore wind, and SMR businesses, focusing selectively on projects that ensure profitability and stable execution. That concludes our remarks on the Q3 performance and market outlook. Thank you very much.
[Foreign language] Now Q&A session will begin. Please press star 3. That is star and 3 if you have any questions. Questions will be taken according to the order you have pressed the number star 3. For cancellation, please press star 4. That is star and 4 on your phone. [Foreign language] The first question will be provided by Lee Dong-heon from Shinhan Investment & Securities. Please go ahead with your question.
안녕하세요. 신한의 이동헌입니다. 설명 잘 들었습니다. 좋은 실적 축하드립니다. 질문은 일회성에 남은 부분이 있는지인데요. 2호의 KiwiRail 프로젝트는 마무리가 된 것 같고, 3호의 변전소 복구 비용은 일부가 보험 환급 같은 게 있는 건지 궁금합니다. 태양의 250억 관련해서 과거 어떤 공사였는지, 그리고 추가적인 비용이 또 발생할 수 있는지, 이렇게까지 설명 부탁드리겠습니다. 감사합니다.
Your excellent presentation. Congratulations on very positive performance. My question is about any remaining one-off costs that might incur. It seems like the KiwiRail settlement is almost completed, and I'm wondering whether there are any remaining costs that could be incurred due to the transformer fire incident affecting Samho. As to that KRW 25 billion offshore project, can you tell us about what the project is, and any additional costs that you're expecting to incur from these KRW 25 billion offshore projects?
네, 답변드리겠습니다. 일단 일회성 남은 부분은 오히려 KiwiRail 쪽에서 아주 작은 물량이지만, 조금 더 환입 가능성이 조금 있고요. 4분기 정도에. 그리고 HD Hyundai Samho는 추가 비용 없습니다. 없고, 그리고 지금 공사 진행 잘 되고 있고요. 그다음에 해양플랜트 부문에서는 P-78 프로젝트가 98% 진행이 되고 있습니다. Shenandoah가 99% 진행이 됐고요. 그래서 이 양쪽 부분에서 약 250억 정도 비용이 일부 발생을 했습니다. 아마 추가 발생은 거의 없다고 지금 이야기를 하고 있습니다.
감사합니다.
Thank you for your question. As to that one-off cost for the KiwiRail settlement case, we're expecting a bit more funds to be coming into our book, and that may happen in Q4. As to the Samho transformer fire incident, we do not expect additional costs that would incur, and construction is going on very smoothly. As to that offshore project, we have P-74 with 98% completion. P-78 with a completion ratio of 98%, and Shenandoah 97%. We do not expect any sizable additional costs that will be occurring.
네, 질문 받겠습니다.
[Foreign language] The following question will be presented by Daol Investment & Securities, Choi Gwang-sik. Please go ahead with your question.
네, 안녕하세요. LNG 시장 좀 여쭙겠습니다. 최근에 모잠비크 다시 탈환한다고 해서 3호의 슬롯도 다시 좀 챙길 것 같은데, 또 지금 FID 발주될 프로젝트 많아서 2029년 슬롯에 우리랑 삼성이랑 한화오션보다 발주가 더 많을 것으로 저는 예상은 되는데, 그래서 내년에 LNG 발주 전망과 또 이런 환경에서 선가에 대해서도 좀 전망을 여쭙겠습니다.
My question is about LNG market outlook. This concerns Mozambique and Samho's slots. It seems like compared to Samsung and other competitors, I think in 2029 you may have more slots to use. My question is, what do you think of the order outlook for LNG ships, and what would be the vessel prices that you're anticipating for next year?
네, 저 전무는 이문석 전무가 답변드리겠습니다. 아시는 바와 같이 LNG선 신조 시장 올해 상당히 침체, 침잠 수준이었는데, 다행히 하반기 들어서면서 최근 미국 Trump 행정부의 LNG 수출 승인 프로젝트 재개가 되면서 최근에 미국에서만 5개 프로젝트가 승인됐고, 전 세계적으로 6개 프로젝트, 총 제가 알기로 5,700만 톤이 신규 수요가 2029년부터 나올 것으로 예상을 하고 있습니다. 그에 따라서 LNG 부문에 대해서 전 세계적으로 관심이 지금 늘어나고 있고, 그에 따라서 신조 인콰이어리도 많이 늘어나고 있는 상황입니다. 관련해서 몇 척이 발주가 될 것이냐? 그런 거에 대해서 사실 디테일한 것은 알 수 없지만, 누락 법으로 저희가 통상 알고 있는 것은 100만 톤에 한두 척 정도, 지금 5,400, 5,600만 톤이라고 하면 사실적으로 거의 100척 이상이 수요가 나오지 않을까? 그런 예상도 하고 있습니다. 선가 관련해서는 이런 수요를 바탕으로 해서 현재의 선가가 지금 바텀이라고 선사들이 인식하고 있는 것 같습니다. 따라서 향후에 이런 물량들이 나오게 되면 내년에는 LNG선 부분 선가가 점진적으로 올라갈 것으로 예상을 하고 있습니다. 이상입니다.
Thank you for your question. About LNG new build.
In fact, this year was quite disappointing. Starting from the second half, thanks to the resumption of approval on the part of the U.S. Trump administration, that's the approval of export projects. We have five relevant projects that have been approved in the United States. Worldwide we have six LNG projects. That is translated into 57 million tons. Such orders would be realized from 2029, I think. Globally, we have increasing interest in LNG with increasing inquiries about new builds. As to the exact number of vessels, I cannot give any definitive answer. As a rule of thumb, 1 million ton is translated into two vessels. Thinking of 56 million ton, that would be more than 100 vessels.
As for the vessel prices, based on the demand, I think now ship owners believe the vessel prices are bottoming out, which means the vessel prices may increase gradually.
네, 다음 질문 받겠습니다.
다음으로 질문해 주실 분은 메리츠증권의 백기언 님입니다. 질문해 주십시오. The next question will be provided by Baek Gi-yeon from Meritz Investment Securities. Please go ahead with your question.
네, 안녕하세요. 메리츠증권 백기언입니다. 이문석 전무님께 일반 상선 쪽 질문 추가적으로 여쭙고 싶은데요. 컨테이너선 내년에도 친환경 선대 전환을 위해서 주요 라이너들 중심으로 발주세 지속될 수 있다는 취지로 말씀 주셨는데, 이번 상선 국면 동안 저희가 워낙 많은 계약 등을 보다 보니까 이런 것들이 내년에도 지속될 수 있는지에 대해서 확신이 필요한 상황인데, 혹시 저희가 얼마 전에 뉴스도 많이 나오는 것 같던데 주요 선사들이랑 수주 문의나 inquiry나 이런 부분, 예정되어 있는 부분, 이런 것들이 아직 많이 남아 있다고 보시는지 다시 한번 여쭙고 싶고요. 혹시 추가적으로 답변 가능하시다면 LPG선 같은 경우에는 이미 많이 나온 것들에 대해서 인도가 어느 정도 해소된 이후에 새로운 신규 발주 수요가 예상된다고 말씀 주셨는데, 그 타이밍은 어느 정도의 시기로 보시는지 말씀 부탁드리겠습니다. 감사합니다.
I have two questions. My first question is about commercial ships. As to the container ships, you mentioned that liners would continue to place orders because of the transition into greener ships and greener fuels coming into next year. There have been so many contracts that have been awarded already. As an analyst, we need a bit of confidence about whether this trend towards the green transition would continue next year as well. It has been already covered by several news articles, but I am wondering whether you are getting inquiries from key liners. How many inquiries are you actually getting? My second question is about LPG. So many LPG vessels have been delivered. You mentioned that new ship build orders may come out after such deliveries are all made. What would be the timing of these new LNG, LPG orders coming?
예, 답변드리겠습니다. 컨테이너선 같은 경우는 주로 대형 컨테이너선 위주로 해가지고 라이너들이 인프라스트럭처로 인식하고 있고, 인프라스트럭처인 만큼 경쟁을 해야 되는 상황입니다. 따라서 더 좋은 배, 더 싼 단가를 가지고 있는 배를 지속적으로 발주해야 될 수요가 있습니다. 실제로 저희가 대형 라이너 선사들하고 계속 협의를 하고 있고, 상세한 내용들에 대해서는 저희가 confidentiality 때문에 구체적으로 말씀드릴 수는 없지만, 계속해서 다수의 라이너들이 신조를 계획하고 있고, 그런 부분들은 내년에 물량으로 나올 것으로 예상을 하고 있습니다. 그다음에 LPG선에 대해서 여쭤보셨는데요. 지금 저희가 LPG선 같은 경우에 2028년부터 납기가 가능합니다.
지금까지 다 수주가, 발주가 되었고, 최근 LPG 운임이 약간 하향세로 돌아서면서 또 나아가서 지금 대형 LNG, LPG선 같은 경우에는 암모니아를 타겟으로 해서 발주가 되는데 암모니아 연료 수요가 좀 늦게 오는 바람에 암모니아 배로 발주된 배들이 LPG선에서 경쟁해야 되는 상황이기 때문에 그런 부분이 감안이 되어가지고 지금 추가적인 수요가 안 나오고 있는 상황인데 저희 판단으로는 올해를 지나고 내년 하반기 정도 되면 그때부터는 인도가 되면서 추가 LPG선에 대해서 수요가 나오지 않을까, 그렇게 예상을 하고 있습니다.
Thank you for your question. As to container ships, they are primarily large-scale container ships. Liners perceive these large container ships as their infrastructure, which means it is a tool for successful competition. Liners believe they need better ships at more affordable prices. We are making consultations with large liner companies, but details are confidential, so I cannot share any details. What I can say is numerous, a large number of liners are planning new builds, and maybe the volume may emerge starting from next year. As to your question about LPG, we can deliver starting from 2028. As you mentioned, many vessels have been already ordered, and in fact, LPG freight rates are going down.
As to large LPG ships, we also have demand for ammonia fueled ships as well, but such ammonia fuel demand has come rather late, which means now LPG and ammonia are in competition. We do not see additional demand immediately. Starting from the second half of 2026, we would be able to start delivery, and then we will see LNG demand coming and emerging.
네, 다음 질문이요.
[Foreign language] The following question will be presented by 이동헌 from Shinhan Investment & Securities. Please go ahead with your question.
질문 감사합니다. 특수선 질문인데요. 특수선 발표가 따로 없으신 것 같아서 질문이 가능한지 모르겠습니다. 한 분기 동안에 MASGA랑 핵추진 잠수함 이야기도 나왔고 다양한 편향들이 나왔는데 관련해서 하이라이트 해 주실 부분 있으시면 말씀 부탁드리겠습니다. 감사합니다.
My question is about special ships, naval ships, because I don't really see any noticeable announcements about special ships. I'm wondering whether I can ask any questions about naval ships. There have been a lot of news about the so-called MASGA initiative, as well as nuclear-powered submarines. Can you share with us any highlights about your special ship business?
특수선 정말 성우입니다. 질문 주신 거 일단 MASGA하고 핵추진 잠수함 관련해서 짧게 공유를 드리면, 얼마 전에 언론에 말씀드린 것처럼 저희는 실질적인 미국 내 프로젝트에 집중을 하고 있고요. 첫 번째 대상 사업으로 미 해군의 차세대 군수 지원함 프로젝트인 NGLS 사업에 집중을 하고 있습니다. 본 사업을 그동안 저희가 협력을 하고 있던 Huntington Ingalls Group하고 공동으로 현재 제안서 참여 중이고요. 원래 당초 10월 말 제출 마감이었는데 그게 아마 현지에서 2주 정도 일정을 연기한 것으로 알고 있고, 저희가 11월 초에 준비 마무리해가지고 본 사업 추진 예정에 있습니다. 그리고 핵추진 잠수함 관련해서는 지난번 필리에서 건조하겠다는 Trump 대통령 발표도 있었는데 아마 이 부분에 대해서는 양국 간에 조금 더 토의가 이어질 것으로 보고 있습니다. 저희는 일단 이 핵추진 잠수함 협의라고 하는 것이, Trump 대통령이 밝힌 바로는 미국 내에서 건조를 해서 이거를 구매하는 형식일 텐데 이러한 잠수함 도입 방식에 대해서는 아마 양국 간 이견이 있을 것으로 보고 있고요.
저희는 어찌 됐든 이게 어떤 한 조선소의 기술적인 역량이나 인력으로는 대응이 불가능한 굉장히 대규모 사업입니다. 그래서 국책사업으로 추진하려는 것을 고려하고 있고, 그를 위해서 저희가 얼마 전에 합병을 통해서 저희 자체적인 건조 캐파가 늘어났습니다. 그래서 저희 기존에 갖고 있던 특수선 사업부의 건조 시설은 기존의 한국 해군의 잠수함이나 그리고 그뿐만 아니라 이러한 잠수함, 캐나다 잠수함과 핵추진 잠수함 등을 고려해서 잠수함 건조 캐파를 대폭 확장할 계획을 갖고 있고, 그렇게 추진할 예정입니다. 감사합니다.
Thank you for your question. As to the MASGA initiative, the nuclear-powered submarines, as you have witnessed and heard from news media articles, currently we are focusing on a project within the U.S. We are focused on building Next Generation Logistics vessels for the U.S. Navy. For this project, we are working with Huntington Ingalls Industries. We are participating together. We are working together with Huntington Ingalls to jointly make a proposal for this project. Initially, the deadline was the end of October, but there was a two-week delay in the U.S. The process, the preparation, and the proposal process will be completed, I believe, by early November. That's what we are working for right now. As to the nuclear-powered submarines, you may have heard that the Philly Shipyard would be constructing such submarines, according to President Trump's announcement.
There would be complications ongoing between the two countries, ROK and the U.S. As to such submarines, what President Trump said is such submarines would be constructed on U.S. soil, U.S. territory, and then it would be purchased later. About exactly how this project will be executed, I believe there would be disagreements between the U.S. and Korea, and such a big project cannot be executed by any single shipyard in terms of capabilities or workforce size. Such a big project, I believe the nuclear-powered submarine, would be a national project. I'd like to tell you that recently we have merged with MEPO, significantly increasing our construction capabilities. We already have a construction capabilities and facilities for the ROK Navy. We also think of Canadian Navy as well.
In preparation, we have significantly expanded and scaled up our construction capabilities for special ships.
최태복 상무입니다. 추가로 말씀드리겠습니다. 우선 원잠에 대한 관심이 많은데
원잠에 대해서는 사실은 지금 개발 단계라고 알려졌지만, 사업이 본격화되면 상당히 많은 엔지니어링 역량이 필요하고 그에 따른 통합된 인력이 필요한데, 그래서 아마 국제적 사업이라는 이야기가 나온 것은 특정 회사 단독으로는 그런 역량을 다 투입할 수 없기 때문에 아마 범부처 또 조선해양 부분도 아마 양대 조선소가 잠수함 건조 능력을 가지고 있기 때문에 그런 합동된 프로젝트가 필요하지 않을까. 그래서 국제사업체 이야기가 지금 나오고 있습니다. 저희들은 그 사업이 만약에 본격화되면 국제사업 참여를 준비를 하고 있는데 문제는 미국 현지 건조 방식이 된다면 상당히 국내 연구개발 사업으로 번역이 어렵습니다. 그래서 지난주 국정감사 종합감사할 때도 의원들이 국방부를 상대로 많은 질문을 했는데 사실은 미국 현지 건조 방식에 대해서는 상당히 실질성이 많이 떨어진다. 그래서 앞으로 한미 정부 간에 그런 부분에 대해서 충분히 논의가 필요하다는 이야기가 있었습니다. 저는 이 부분 통역되고 나면 나머지 특수선 사업에 대한 것을 간단하게 추가로 설명드리겠습니다.
I'd like to make some additional comments about nuclear-powered submarines. This is an issue which is receiving plentiful interest these days. You may think this is in the development phase, but once this project begins at full scale, it's going to require tremendous engineering capabilities, and especially combined and integrated capabilities. That is why at the National Assembly, this project is considered a national project, because no single shipyard would be sufficient in terms of putting in all its resources. It's a pan-ministry or a pan-government project, and we have two major shipyards here in Korea capable of constructing submarines. This is going to be a joint project, I believe, if it is ever realized. Someday, we are making preparations to participate in this project if it starts.
About the local construction in the United States, it's not a domestic R&D project or initiative anymore. Last week when we had a national audit, there were a lot of questions that were posed to the Ministry of National Defense. If such submarines are constructed within the United States, this project would lose its feasibility to a significant extent. There will be a lot of exchanges between the U.S. and Korean governments. I'd like to provide part two of my answer.
추가로 말씀드리면 오늘 보도자료가 나갔는데 저희들이 페루 SIMA 조선소와 잠수함 공동개발에 대해서는 LOI를 체결했기 때문에 그다음 단계는 계약으로 들어갑니다. 그래서 저희들은 SIMA 조선소와 잠수함 개발에 대한 실적을 가지게 되면 앞으로 전 세계를 대상으로 수출용 잠수함에 대한 탄력을 받을 것으로 보고 있고, 또 정부를 대상으로 하는 수주 사업이다 보니 오늘 발표는 안 됐지만 잠재적으로 진행 중인 그런 사업들이 연말 또는 내년 초에 체결될 가능성이 있습니다. 그래서 다음 분기에는 특수선 분야도 보다 더 진전된 그런 실적을 말씀드릴 수 있겠습니다.
We have just made a press release this morning, which is we're going to work with SIMA shipyard in Peru to jointly develop submarines. The letter of intent has been signed, and we'll move on to the next contracting phase. This means we're going to be able to build our track record in submarine development. Globally, we will be able to target the submarine export market as well. Such a project is working with national government. Even though it has been announced yet, there are more potential projects that could be leading to the next phase of project development. These projects will be announced at the end of this year or early next year, I believe.
In the next quarter, when we have an earnings release next quarter, I hope we will be able to share even more tangible progress as to our special ship business.
네, 추가 질문 받겠습니다.
[Foreign language] The next question will be presented by 정연승 from NH Investment Securities. Please go ahead with your question.
네, 안녕하세요. NH투자증권 정연승입니다. 방금 조금 말씀해 주신 부분이 있기는 한데, 워낙 특수선 쪽에서 국내나 미국 말고도 다른 나라에서 진행되고 있는 수출건에서 조금 더 말씀해 주실 수 있는 부분이 있는지, 동남아나 남미 외에도 유럽이나 이런 거에서 이슈가 있을지 조금 더 알려주시면 좋을 것 같고요. 혹시 저희도 잠수함 쪽에 좀 더 많이 이야기가 나오긴 했는데 사실 수상함 쪽에 워낙 강점을 가지고 있어서 수상함 쪽에서 혹시 조금 더 이야기해 주실 수 있는 부분이 있으신지 알려주시면 감사하겠습니다.
I have two questions. The first question is about special and naval ships. In addition to the U.S. and Korea, can you share with us any export market projects that are ongoing, for example, in the Southeast Asia, Latin America, and Europe as well? Second of all, we are still focused on submarines these days, but I know that your company has strength in building surface ships as well. Anything more that you can share concerning your surface ship business?
잘 아시는 것처럼 필리핀과는 필리핀 해군 인도가 계획이 계속 진행 중이고, 그에 따라 추가로 나온 발주 건에 대해서 저희들이 지금 협상 중에 있습니다. 아마 우리가 구체적으로 말씀드리기는 그렇지만, 가장 먼저 소식을 드릴 수 있는 것은 필리핀 호위함 사업이 될 것으로 보고 있고, 또 페루와 필리핀 실적을 기반으로 동남아와 다른 국가에서도 지금 우리 호위함 사업에 대해서 관심을 가지고 있어서 몇 개 국가와 지금 협의가 진행 중이고, 물론 그 부분은 유럽이나 다른 나라와 경쟁 관계에 있습니다. 쉽지는 않지만 저희들이 이미 실증 모델을 갖고 있기 때문에 그런 데에서 상당히 강점이 있습니다. 잠수함은 앞서 말씀드린 것처럼 페루 잠수함 모델이 개발돼서 실적이 만들어지면 포르투갈이나 다른 나라에서도 관심을 가지고 있기 때문에 이전 2,000-ton 이하 잠수함 시장에서 우리가 상당한 수출 경쟁력을 가질 것으로 보고 있습니다.
Thank you for your question. Currently, the Navy modernization project is ongoing with the Philippine Navy, and for additional orders, negotiations are ongoing. We cannot disclose details, but if we share any news for the first time about our export cases, then it's going to be the Philippines and especially frigates for the Philippine Navy. Once we build a track record working with Peru and the Philippines, then we will be able to advance into Southeast Asia and other countries, because there are countries interested in our frigate construction capabilities. The consultations are ongoing, but in this sense, we're in competition against our European competitors. It's not easy, but we already have a demonstration model. In that sense, we have strength.
As to submarines, once we develop submarines and demonstrate the submarines while working with Peru, we already have Portugal, which is interested in our projects, and especially it's below 2,000-ton submarines. In that sense, I think we can build our competitive edge for 2,000-ton and below submarines.
네, 추가로 캐나다 잠수함 사업과 폴란드 잠수함 사업은 One Team MOU 정신에 따라 양사가 같이 역량을 통합해서 대응 중에 있습니다. 내년에 좋은 소식이 전달되면 좋겠습니다.
As to submarines, potential submarine projects with Canada and Poland under the One Team spirit, both companies are responding to potential project needs, integrating our capabilities. I hope that I can share good news next year.
네, 추가 질문 받겠습니다.
[Foreign language] The following question will be presented by Kang Kyung-tae from Korea Investment & Securities. Please go ahead with your question.
네, 안녕하세요. 저 한투의 강경태라고 합니다. 질문해 주셔서 감사드립니다. 저의 질문은 HD현대미포의 선박 수주 관련한 내용입니다. 미포가 합병 맞춰 전초로 해서 3분기만 보자면 거의 수주가 멈춰 있는 상태이고, 갈수야드를 총괄해서 에이시아 오림스가 상황에서 지금 대한조선도 선불 출자로 빠져나가 있는데, 혹시 지금 아시아 야드랑 HD현대미포의 울산 야드랑 기능 배분이 지금 이미 이루어져서 수주가 그렇게 나눠져서 이루어지고 있는 것인지, HD현대미포 울산 야드에서 MR 탱커나 피더식 수주가 이제 멈췄다고 보면 되는지 한번 부탁드리고요. 올해 목표하셨던 LNG bunkering vessel도 우리 입에서는 지금 덜 들어오고 있는 것 같습니다. 합병 후에 HD현대중공업 합병 법인의 선관 쪽 매출 추정을 위해서 여쭤본 것이고, 관련해서 답변 부탁드리겠습니다.
Commercial ship exports of Mipo, because before and after the merger, seems like all the activities of Mipo have virtually stopped. Mipo has a shipyard in Ulsan, my question is about the division of labor, I would say, or functionalities, because when I look at mid-range tankers and feeder ships, seems like all the activities have, again, almost stopped. As to LNG bunkering vessels, I think we have less volume this year. What's happening to Mipo as to commercial ship exports?
이운석 부사장님, 대답드리겠습니다. 미포 영업에 관해서 말씀드리면 합병하고 미포 영업하고는 관련이 없습니다. 미포 영업이 현재 정체돼 있는 것으로 보이는 것은 실제로
중형선 부분에는 아까 말씀드린 바와 같이 올해 전반적으로 수주가 대폭 줄어들었습니다. 작년의 반 수준으로 줄어들었고요. 미포 같은 경우, 중형선 같은 경우에는 특히 작년에 대량으로 발주가 되는 바람에 MR 같은 경우 작년에 제 통계 숫자에 따르면 157척이 발주가 되었고, 통상적으로 평균 48척 정도가 발주가 되는데 그렇게 생각해 보면 작년에 많이 발주가 된 게 맞는 거예요. 그다음에 올해 같은 경우에는 MR 같은 경우에 36척이 발주가 된 것으로 지금 파악이 되고 있습니다. 그중에 10척은 Philly Shipyard 거고요. 따지고 보면 작년에 비해서 23% 수준. 중형선 같은 경우에는 시장 수요가 더 많이 줄어든 그런 모양이기 때문에 발주가 안 된 모양으로 이렇게 보여지는 것 같고요. MR은 그렇고, 피더는 현재 저희가 올해 상반기에 대부분 20척을 납기 다 팔았습니다. 지금 저희가 가능한 납기가 28년이고 하다 보니까 아무래도 작은 배들은 코모디티 성격이 강하다 보니까 납기가 뒤로 빠지게 되면 경쟁력이 좀 떨어지고 선호도가 떨어지는 상황입니다. 그래서 지금 피더선이 수주가 좀 좋지 못한 상황이고요.
전반적으로 시장 자체가 지금 좋지 못한 상황이라서 수주가 좀 그런 거지, 그게 합병하고 연결되어 있기 때문인 건 아닙니다. 이상입니다.
필리.
필리.
Thank you for your question. What I can say is the merger and HD Hyundai Mipo's operations are not related. These are two separate issues. It seems like HD Hyundai Mipo's operations are stagnant. It is because the mid-range ship market itself is stagnant. This year, it is true that orders have declined to half of last year. It is because last year in 2024, so many mid-range ships were ordered. Mid-range ships, around 157 mid-range ships were ordered last year. In fact, the average number is around 48. Many orders placed last year, and now this year, about 36 mid-range vessels were ordered, and 10 of them are for the Philly Shipyard of Hanwha. That is only 23% of 2024. The mid-range, the market demand itself is sluggish. It makes the situation look like HD Hyundai Mipo is not really receiving orders.
About the feeder market, in H1, in the first half of this year, we have filled all our delivery capacities already. We can deliver only after 2028. These small ships, they are perceived as commodities, which means if their deadline is postponed, then they will lose their preferences and competitive edge as well. It seems like order activity is stagnant. Again, I would like to say the market itself is sluggish and stagnant.
추가로 말씀을 드리면, 이 포괄조선이 2025년 12월 1일부터 합병은 되지만, 합병 이후에 매출의 변화는 2028년부터 발생할 것으로 예상이 됩니다. 2027년까지 슬롯이 다 차 있는 상태고, 지금부터 저희들이 전략적으로 수주하려고 하는 부분들, 미국에서 하려는 부분들이 군사 지원선이나 그다음 전략 탄선함 같은 것들은 지금 수주를 해도 2028년부터 매출이 발생을 하기 때문에 합병 효과로 인한 매출 증가 효과는 그때부터 성립된다고 보시면 될 것 같습니다.
12월 1일.
12월 1일.
The merger takes effect from November 1st of this year.
12월 1일.
December 1st of this year that the merger will take effect. Any change in revenue would be witnessed only after 2028. It is because the slots are already filled by 2027. If it is for strategic orders targeting the U.S., that would be referring to Next Generation Logistics Ships and strategic commercial ships. Even though we receive orders right now, these will be recognized as revenue only after 2028.
네, 지금 시간이 많이 지났는데요. 한두 가지 정도 질문 더 받고 마치도록 하겠습니다.
다음으로 질문하실 분은 삼성증권의 한영수님입니다. 질문해 주십시오. The following question will be presented by Han Young-soo from Samsung Securities. Please go ahead with your question.
마지막 질문 기회여서 저도 두 가지 여쭤보고 싶은데요. 하나는 HD현대미포 이익률이 많이 개선이 된 것 같습니다. 원래 현중이랑 합병하면 전사 이익률이 희석될 거 좀 걱정했었던 것보다는 고무적인 내용이기는 한데, 이게 믹스를 보면 미포는 이번에 2024년 수주의 매출 비중이 확 올라가서 그런 거거든요. 그래서 미래의 그림을 봤을 때 현중하고 비교하면 양사의 이익률이 향후로 미포도 더 개선이 돼서 수렴을 하는 그림일지, 아니면 미포는 고마진 수주가 먼저 매출에 반영이 돼서 올라왔기 때문에 미포는 이 정도 수준에서 유지하면서 현중이 더 올라가는 그림일지, 양사의 향후 마진의 방향성이 어떻게 될지 조금 궁금하고요. 두 번째는 해양 부문 수주가 좀 많이 늦어지는 것 같아서요. 이것 때문에 향후에 해양 매출이 좀 감소하는 구간이 혹시 발생할 리스크가 없는지, 혹은 없다면 언제까지 저희가 해양 수주를 해야 이런 우려를 안 할 수 있는 건지, 그 마지노선 같은 게 있는지 궁금합니다. 감사합니다.
I have two questions. The first question is about the proportion of profit, I would say, between HD Hyundai Heavy Industries and Mipo. It seems like Mipo's profit margin has improved greatly. Initially, we were worried that this merger would rather dilute the overall profitability, but it seems like it's not the case, and this is highly encouraging. When we look at the overall picture, my question is, the profitability of these two companies would converge to quite an equitable level? Or is that HD Hyundai Heavy Industries margin would go up further, and Mipo would maintain the current level of profitability? The proportion of contributions, I would say, to the overall profitability between Mipo and HD Hyundai Heavy Industries. That's my first question. My second question is about offshore structure, because the order activities are being delayed, and we have worries that profitability may decline.
My question is, until when should you engage in ordering activities so that it will eliminate any worries or concerns about the profit of offshore structure business? To answer your first question, it's true that Mipo's OP margin has improved significantly to a close level, to almost equal level of HD Hyundai Heavy Industries. Of course, HD Hyundai Heavy Industries would have a higher OP margin overall compared to Mipo. In fact, the losses from offshore plant business was covered by engine business at HD Hyundai Heavy Industries. As to the commercial ships, actually the LPG proportion is higher within HD Hyundai Heavy Industries, so overall margin would be higher within HD Hyundai Heavy Industries compared to Mipo. I think next year, OP margin of both companies would rather converge to quite a similar level.
As to the offshore structure business, our Trion project is accelerating and the Ruya project has just begun. If we continue with our ordering activities until the first half of 2026, then at least on revenue basis, we won't have declines happening. In fact, biddings are mostly concentrated in the first half of next year. You may look forward to this market. I'd like to make one correction. When I answered your first question, I mentioned LPG, but it's not LPG, but LNG. That's one correction that I'd like to make.
Due to technical glitch, we couldn't really receive this question. We would like to entertain one final question. The final question will be presented by Lee Dong-heon from Shinhan Investment & Securities. Please go ahead with your question.
참여 감사합니다. 간단한 것 두 가지만 여쭙고 마무리하겠습니다. 상선의 매출 성장 속도가 예상보다 빠른데, 이렇게 되면 후선의 공정 진행 자체가 빨라져서 내년부터는 조기 인도가 되는 부분도 나올 수 있는지 이게 한 가지고요. 또 하나는 특수선 관련해서 미국 법인은 언제 설립할 수 있을지 가능이 됐는지 이렇게 질문입니다. 감사합니다.
Thank you for the opportunity. My first question is, I think your commercial business is experiencing quite rapid growth in revenue and sales. My question is about the possibility of early delivery of your commercial ships. The second question is as to your special ship business. When are you going to establish a corporation or subsidiary in the U.S.?
일단 전에도 말씀드렸지만, 지금 작년 하반기부터 저희들의 매출 성장 속도가 조금씩 빨라지고 있습니다. 그만큼 조기 인도가 이루어지고 있다는 소리죠. 금년에도 원래 계획보다도 지금 10%, 15% 이상 빨라지고 있는 것 같거든요. 그만큼 조기 인도가 이루어지고 있고, 그만큼 선표가 조금씩 당겨지고 있다, 이렇게 말씀드릴 수 있겠습니다. 아마 내년에도 마찬가지일 거고요.
As to your first question, as you said, starting from the second half of last year, 2024, the pace of revenue generation is really speeding up and being accelerated. This is translated into early deliveries. This year, we already have 10%-15% acceleration. This is again, is translated into faster construction. That would happen this year and next year as well.
그다음 미국 법인에 대해서는 조금만 기다려 주세요. 저희들이 지금 준비를 실제로 하고 있고, 전에는 준비가 안 되었다고 말씀드린다면 앞으로는 미국 쪽 계획에 대해서 준비가 되는 대로 크게 답변을 드릴 수 있도록 그렇게 할게요. 지금은 준비 중에 있습니다.
As to our U.S. subsidiary, please wait and see. Your patience would be greatly appreciated. We're making preparations. Previously, we told you that we are in the preparation phase. Now I hope we can share any updates that we make on our U.S. subsidiary as soon as we make them.